A UITF (unit investment trust fund) is a pooled fund run by a bank’s trust department under the rules of the Bangko Sentral ng Pilipinas (BSP). You buy units in the fund. Their value moves every day with the investments inside it. A UITF is not a deposit, so the Philippine Deposit Insurance Corporation (PDIC) does not cover it, and any loss from market moves is yours, even in a fund that holds government securities.
Those last points come straight from the BSP’s rules: before you invest, the bank must show you a statement that the UITF “is a trust product and not a deposit account”, “is not insured or governed by the PDIC”, that returns “cannot be guaranteed”, and that losses from market changes are “for the account of the client” (Manual of Regulations for Banks, Sec. 414).
How a UITF works
- Units and NAVPU. The fund’s value is split into units. The price of one unit is the net asset value per unit (NAVPU): the value of everything the fund holds, minus its costs, divided by the number of units.
- Priced every banking day. BSP rules say “the NAVPu shall be computed daily”. When you buy or sell, the bank uses the end-of-day NAVPU.
- Cut-off times. Each fund has a daily cut-off. An order after it is processed at the next banking day’s NAVPU.
- What you earn. You earn only if the NAVPU when you sell is higher than when you bought, after fees. There is no fixed interest.
Fund types
UITFs are usually grouped by what they hold, from lower to higher risk:
| Type | What it mostly holds | How much the value moves |
|---|---|---|
| Money market | Very short-term deposits and debt | Least |
| Bond (fixed income) | Government and corporate bonds | Moves with interest rates |
| Balanced | A mix of bonds and shares | In between |
| Equity | Shares listed on the stock exchange | Most |
| Index | Shares in a stock market index, tracked rather than picked | Like an equity fund |
| Feeder | One fund abroad, often in US dollars | Depends on that fund, plus exchange rates |
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The fund’s own documents name its type, what it may invest in, and its benchmark.
Fees and risks to check
- Trust fee. A yearly fee, taken from the fund, so it is already in the NAVPU.
- Early redemption fee and minimum holding period. Many funds charge a fee if you sell within a set number of days.
- Minimums. Each fund sets its minimum first investment and top-up. They differ, so we give no figure.
- Market risk. The NAVPU can fall below what you paid. That is true of bond funds too, when interest rates rise.
- Currency risk in dollar and feeder funds.
Before your first investment, the bank must assess whether the fund suits you, “to profile the risk-return orientation and suitability of the client” (BSP rules, Sec. 414). Answer it honestly; it is there to protect you.
UITF vs mutual fund in brief
| UITF | Mutual fund | |
|---|---|---|
| Run by | A bank’s or trust company’s trust department | An investment company, through a fund manager |
| Regulated by | BSP | SEC (Investment Company Act, RA 2629) |
| What you own | Units, priced by NAVPU | Shares, priced by net asset value per share (NAVPS) |
| Covered by PDIC? | No | No |
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Our mutual funds guide goes through the full comparison.
How to start
- Open a trust or investment account with a bank that offers UITFs. Many let you do this online.
- Take the risk profiling questionnaire. The bank uses it to decide which funds suit you.
- Read the fund’s documents before you buy: its type, fees, holding period, cut-off time and benchmark.
- Top up regularly if you like. Putting in the same amount at set times means you buy more units when the price is low and fewer when it is high.
A UITF approved for PERA can also be held inside a PERA, which adds tax benefits for retirement savings. See the PERA guide.
Questions people ask
What is a UITF?
A unit investment trust fund is a pooled fund run by a bank's or trust company's trust department under BSP rules. Many people's money is put together and invested in one portfolio. You own units in the fund, and their value, the NAVPU, is worked out every banking day.
Can I withdraw my UITF anytime?
Usually you can ask to redeem on any banking day, at that day's NAVPU if you are before the fund's cut-off time. Many funds set a minimum holding period and charge an early redemption fee if you leave before it ends, and the amount you get back depends on the NAVPU that day, which can be lower than what you paid. Check the fund's own rules first.
Is a UITF a good investment?
It depends on the fund, how long you can leave the money, and how much of a fall you can live with. A money market UITF usually moves less; an equity UITF can rise or fall a lot. UITFs are not deposits and are not covered by PDIC, and the bank must tell you that returns are not guaranteed. Past returns do not tell you what a fund will earn next.
Talk it through
Talk through where funds fit in your planSources
- BSP, Manual of Regulations for Banks, Part IV, Sec. 414, Unit Investment Trust Funds (2023 edition) (checked 20 October 2026)
- RA 3591 as amended by RA 9576, Sec. 4(f), what deposit insurance does not cover (lawphil.net) (checked 20 October 2026)
- RA 2629, Investment Company Act (lawphil.net) (checked 20 October 2026)
- BSP, PERA frequently asked questions (checked 20 October 2026)